Many of today\u2019s corporations have thousands of employees and control billions of dollars in assets and it is the large corporations that define the structure of the nation\u2019s economy in the USA.
\nThey often dominate major industries and regional economies, and make it possible to produce goods and services that require combining massive amounts of capital, technological know-how, labour resources, managerial skill, and the ability to obtain and process large and nodiverse amounts of information.<\/p>\n
In 1990 the combined sales of the large 500 US industrial corporations were estimated as $2.3 trillion, profits reached $93.4 billion, and they collectively employed nearly 12.5 million workers.
\nThe combined annual revenues of the world\u2019s top five corporations alone were nearly $450 billion and it was more than the gross national product of several countries.
\n
\nBusiness having become more competitive, new and more complex corporate combinations appeared.
\nThey are known to be formed by the absorption of one or more companies by another, the merger process involving either acquiring a controlling share of a company\u2019s stock or buying the company outright.
\nMany corporations have expanded by means of mergers with and acquisitions of businesses in unrelated industries, such collections of businesses being called conglomerates.<\/p>\n
For instance, International Telephone and Telegraph achieved its growth by absorbing such companies as Sheraton Hotels, Avis Car Rentals, the Hartford Insurance Company, Continental Bakeries, and others.
\nAntitrust laws preventing the growth of the corporations within a single field have promoted the establishment of conglomerates.
\nBetween 1955 and 1980 the top 500 corporations absorbed some 4,500 smaller companies.
\nOne problem caused by mergers is that the economic growth does not necessarily result from them, and no new jobs may be created, sometimes acquisitions influencing negatively the country\u2019s economy.
\nFor example, a small company may be acquired by a larger one, have its assets drained off, and then be liquidated, causing the loss of jobs, goods or services, and competition.<\/p>\n